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9.27 pm
Dr. Brian Iddon (Bolton, South-East): First, I want to take issue with the hon. Member for Huntingdon (Mr. Djanogly), who popped into the Chamber, made a brief speech and then left. Unfortunately, he is not present now. He said that leasehold is a choice. I want him to consider the situation in my constituency, where it is difficult to find a freehold house to purchase. Large landowners such as Bridgewater Estates have rented, not sold, huge tracts of land. In most north-west towns such as Bolton and Bury, the choice is leasehold, leasehold, leasehold
Secondly, Estate Management Ltd., which my hon. Friend the Member for Brent, North (Mr. Gardiner) mentioned only briefly, has sent out thousands of letters in my constituency demanding ground rents of £1.50 and £2.50, but charging anything between £45 and £110 administration fees for doing so. I have even caught it sending them to the odd constituent who has no legal connection to it. Is it a statutory duty for the people who graze ground rents to write to every householder whose freeholds they are purchasing? If it is not, it ought to be and, if it is, leaseholders should know about it.
I turn now to the Compton Group, to which my hon. Friend the Member for Bolton, North-East (Mr. Crausby) has already referred. As hon. Members have heard, that company has written letters to hundreds of people throughout Bolton, demanding that leaseholders take out insurance policies with AXA Insurance. That subject has been well covered, but I took the trouble to look at one of these ancient deeds. As my hon. Friend the Member for Burnley (Mr. Pike) said earlier, many of them are
difficult to read, where indeed they exist at all, because they are handwritten. One set of deeds concerning which AXA, through the Compton Group, is demanding money says that buildings insurance should be
- "in some insurance office to be reasonably approved by the company to the full value thereof."
Finally, I am against leasehold. Its time is up, and we should ban it.
9.31 pm
Mr. Geoffrey Clifton-Brown (Cotswold): This has been a long, complex debate. We have heard 15 speakers, and I pay tribute to them all, but I am sure that you will understand, Mr. Speaker, if I am unable to deal with every speech in detail.
Before I go any further, I should declare my interests. I own one long leasehold flat in London. I have various freehold properties, to which I do not think the Bill will apply, and I am one of only four members of the Royal Institution of Chartered Surveyors in the House, who will undoubtedly have some work as a result of the Bill.
The Parliamentary Secretary, Lord Chancellor's Department gave the Bill a balanced, worthwhile introduction and, by contrast, it was interesting to hear some Labour Members talking about that old dinosaur the wicked landlord. Anybody who thought, like me, that old Labour was dead would have reassessed that view this evening.
There were some excellent speeches from hon. Members on the Opposition Benches, and I pay particular tribute to my hon. Friend the Member for Solihull (Mr. Taylor). He is a lawyer and I am a valuer, and I have full sympathy with his comments about the difficulties concerning valuations under the Leasehold Reform Act 1967 and the Leasehold Reform, Housing and Urban Development Act 1993, which were complemented by the right to manage introduced in the Housing Act 1996. That point was emphasised by the hon. Member for Cleethorpes (Shona McIsaac), who is not in her seat at the moment, although she opposed the idea of the marriage value, whereas my hon. Friend the Member for Solihull commended the Bill for introducing some simplicity to the marriage value provisions. I agree that for too long the marriage value has been a stumbling block to leasehold enfranchisement and the creation of commonholds.
We must not forget that 1 million flats and 1 million leasehold houses may be subject to the Bill's provisions, so some 4 million people may be affected by it. It is therefore an important Bill. It is also a complex one, with 174 clauses and 14 schedules. On the whole, as my hon. Friend the Member for Stone (Mr. Cash) said in his
excellent, comprehensive speech, the Opposition welcome it, although there are a number of shortcomings that I should like to address in the very short time available.
Roger Casale (Wimbledon) rose—
Mr. Clifton-Brown: I shall give way only once because I do not have much time.
Roger Casale: I welcome the hon. Gentleman's support for the Bill and his understanding of the practical need for reform, but does he not understand that there are important democratic principles underlying the Bill, which will empower leaseholders and help to renew our communities and entrench the important principles of openness, transparency and accountability in a more modern society?
Mr. Clifton-Brown: I agree entirely. In welcoming the introduction of the Bill, my hon. Friend the Member for Stone made it clear that the system of leasehold was designed in another age and that things had moved on. We welcome the concept of commonhold and consider it especially appropriate for new developments. However, the Bill must address the important issue of developments that have not yet been built and so cannot be subject to its provisions. Perhaps the Minister will comment on that in relation to the increasing tendency to buy residential properties from plan, before they are built. It would be a pity if the Bill could not be made to apply to buildings that have not yet been built. I welcome the intervention from the hon. Member for Wimbledon (Roger Casale). Over time, the Opposition expect leasehold to die out—although I expect that to take some time.
My hon. Friend the Member for Stone made some important points that were echoed by other speakers. I was especially impressed by the speech of the hon. Member for Rother Valley (Mr. Barron), who movingly described his experiences of trying to purchase a leasehold flat. We all hope that the Bill will make it easier for those who want to enfranchise their leasehold property to do so. Like many speakers, I suspect that the no-fault right to manage introduced under part 2 will prove to be a more popular course of action. Perhaps people will start with right to manage and then decide to enfranchise. We welcome that.
The hon. Member for Torbay (Mr. Sanders), who I suspect is a professional accountant, criticised the right-to-manage provisions. He asked about how individual companies would be organised, the provisions of the Companies Acts, the treatment of defaulters, and mechanisms to deal with people involved in management companies who default. The latter is an important subject and was mentioned by several speakers. The hon. Gentleman mentioned the possibility of using existing provisions for debt collection through the county courts, which might be a good mechanism, although others are possible. I have no doubt that the matter will be debated in Committee.
The hon. Member for Burnley (Mr. Pike) made an impassioned speech about rogue landlords and excessive insurance premiums. My hon. Friend the Member for North–East Hertfordshire (Mr. Heald) also mentioned rogue landlords, and several other speakers referred to forfeiture. Forfeiture is an extreme provision of the
current Landlord and Tenant Acts and is used sparingly. I accept that it is a blunt weapon, and I am sure that the Committee will discuss other ways of dealing with defaulting members of commonhold associations. As I said in an intervention, a defaulting member of a commonhold association places an additional burden on all the other members, so there must be a swift and sharp method of dealing with defaulters.The hon. Member for Bolton, North-East (Mr. Crausby) also mentioned insurance and forfeiture. I want a provision to be inserted into the Bill that allows lessees to insure with an insurance company approved by the landlord, thus giving them control over insurance, and enabling the landlord to ensure that the property has been insured properly merely by inspecting the insurance policy. That strikes me as providing good protection for existing lessees. In no-fault right-to-management companies, the commonhold community statement will lay down the powers of insurance.
In my own block of flats, residents used the provisions of the Housing Act 1996 to take over the management in part because all the long leaseholders were vexed by issues of insurance and cost of management. Now, we are able to obtain far cheaper insurance; in addition, rebates that did not come back to us before are now coming back to the long leaseholders. No doubt, with the increasing use of the no-fault right-to-manage companies, people will get a better deal on the management of their property. I agree with the hon. Member for Telford (David Wright) that people might think that the Bill is an excuse to reduce property management costs. That may well happen; but the job of the commonhold association and any management consultants appointed to help them will be to point out realistic management charges.
My hon. Friend the Member for Huntingdon (Mr. Djanogly) rightly pointed out, in contrast to some of the old Labour dinosaurs who are not private rental landlords, the importance of getting institutional investment into the residential sector. Unless we get such investment, we will not meet the Government's target of an affordable and decent home for all by 2020, or anything like it. Labour Members need to consider that very carefully indeed when they knock the role of private landlords.
My hon. Friend the Member for Leominster (Mr. Wiggin) emphasised the length of the Bill and the difficulty of converting, in the Government's wording, the 100 per cent. requirement to commonhold. Many Members spoke about that, especially my hon. Friend the Member for North–East Hertfordshire. Somebody with a relatively minor financial interest in a leasehold property—my hon. Friend mentioned cautioners; I mention people with a lien or mortgage on a property or someone with a minor interest—could block the whole commonhold application on a block of properties. Many Members mentioned that; I hope that in Committee the Parliamentary Secretary will consider it very carefully indeed. As the Royal Institution of Chartered Surveyors made clear, that is effectively a wrecking provision because in virtually every case it will be impossible to get 100 per cent. agreement. Both the Parliamentary Secretary and the Under-Secretary, the hon. Member for Northampton, North (Ms Keeble) will have heard the widespread concern of Government Back Benchers and Opposition Members about the provisions of the Bill as drafted.
It is curious that there is a 100 per cent. threshold for the requirement for commonhold agreement, yet there is only an 80 per cent. threshold when a commonhold community statement is to be terminated. Those two different thresholds make an interesting contrast in the Bill. A threshold nearer the termination provisions for CCS may be more correct, but no doubt we shall have some interesting debates, and probably votes, on the matter in Committee, on Third Reading and on Report. I hope that the Parliamentary Secretary can be flexible, as that seems to be a major lacuna in the Bill.
We need to return to a number of more minor matters in Committee. My hon. Friend the Member for North-West Norfolk (Mr. Bellingham), who has great knowledge of the whole subject, made an excellent and rapid speech towards the end of our debate. Like me, he was involved in introducing the Leasehold Reform, Housing and Urban Development Act 1993. Sadly, he was not involved in introducing the Housing Act 1996, but we are delighted that he is back in the House today; long may he remain here. He, too, commented on the welcome introduction of commonhold and said that hopefully over a period it would become the more likely form of tenure for all non-freehold residential properties in this country.
There are one or two things that I should like to mention in summing up. It is particularly unfortunate that a Bill of this size and complexity, which has received a general welcome throughout the House, should be subject to the timetable set out in the Order Paper. For a Bill of 174 clauses to have a Committee timetable of just two weeks is inadequate; it does no service either to our constituents or to democracy. The Government should be ashamed of themselves, and I hope that on future occasions they will think about whether it is necessary to have a timetable of that sort. I have now been involved in two Bills on which there was no timetabling whatever, the last of which was the Homelessness Bill. The Under-Secretary, who is to make the winding-up speech tonight, led the Committee that considered that Bill. It was conducted perfectly satisfactorily, just as the Bill that is before us could be conducted satisfactorily. A number of weaknesses on which all-party agreement has been evident could easily have been sorted out in Committee.
This has been a comprehensive debate and this is a welcome Bill. Many people in this country will welcome what we are doing tonight. They will not welcome it, however, if the Bill that is put on to the statute book is wrong, inadequate, has shortcomings and imposes increased costs for leaseholders and commonholders because it has flaws. I hope that, in future, when we consider such Bills, we will not have a timetable such as that which is on the Order Paper today.
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